(Ch. 1) The three basic economic questions everyone must answer are ___________________.
WHAT to produce, HOW to produce, FOR WHOM to produce
(Ch. 1) The economic concept of __________ is the sum of those economic products that are tangible, scarce, useful, and transferable from one person to another.
(Ch. 1) A diagram representing various combinations of goods and/or services an economy can produce when all productive resources are fully employed is the __________ .
Production Possibilities Frontier
(Ch. 2) One advantage of a __________ economy is that it gradually adjusts to change over time.
(Ch. 2) The main drawback of the traditional economy is that it ____________ .
tends to discourage new ideas and ways of doing things
(Ch. 2) What are the five characteristics of a free enterprise economy?
economic freedom, voluntary exchange, private property rights, the profit motive, and competition
(Ch. 3) What is the difference between a horizonal and vertical merger?
Horizontal merges two companies that produce like products. Vertical merges two companies that produce different products.
(Ch. 4) According to the Law of Demand, when the price of a good is lowered, demand __________.
(Ch. 4) A change in demand means that __________.
consumers are willing to buy different amounts of a product at the same prices
(Ch. 4)The extent to which a change in price causes a change in the quantity demanded is called __________.
(Ch. 4) If a product has many substitutes, demand for that product tends to be __________.
(Ch. 4) If demand for an item decreases with a small increase in its price, demand for that item is __________.
(Ch. 5) Problems regarding fairness, high administrative costs, and diminished incentives to work and produce can be the result of __________.
nonprice allocation systems
(Ch. 5) Advantages of using prices to allocate goods and services include:
freedom of choice, no administrative costs, neutrality, flexibility, and efficiency.
(Ch. 5) Economist often use a(n) __________, a set of assumptions and/or relationships that can be listed in a table, illustrated with a graph, or even stated algebraically, to help analyze behavior and predict outcomes.
(Ch. 5) The actual price changes in any given market are likely to be greater if both supply and demand are __________.
(Ch. 5) If the fixed price is a __________, as in the case of rent controls, a shortage usually appears for as long as the price remains fixed below the equilibrium.
(Ch. 6) The amount of a product that would be offered for sale at all possible prices that could prevail in the market is called __________.
(Ch. 6) The __________ schedule is a listing that shows the various quantities of a particular product supplied at all possible prices in the market.
(Ch. 6) The three stages of production are Stage I __________, Stage II: __________, and Stage III: __________.
(Ch. 6) One kind of cost is __________ cost, the cost that a business incurs even if the plant is idle and output is zero.
(Ch. 6) As more workers are added, the business reaches the __________ point, the total output or total product the business needs to sell in order to cover its total costs.
(Ch. 7) A(n) __________ may start a price war in order to get a larger share of the market.
(Ch. 7) A monopoly based on ownership or control of a manufacturing method is a _______ monopoly.
(Ch. 7) When sizable deviations from one or more of the conditions required for perfect competition take place, __________ occur.
(Ch. 7) Many activities generate some kind of __________, or unintended side effect that either benefits or harms a third party not involved in the activity that caused it
(Ch. 7) The __________ Act sought to do away with restraints and monopolies that hindered competition or made competition impossible.
(Ch. 7) In the case of a(n) __________, it makes sense to let the firm expand to take advantage of lower production costs, and then regulate its activities so that it cannot take advantage of the consumer.
(Ch. 7) The purpose of __________ is to provide the market with enough data to prevent market failures due to inadequate information.
(Ch. 8) The National Labor Relations Act established ___________.
the right of unions to collective bargaining
(Ch. 8) The ____________ is an agreement that does not require a worker to join a union as a condition to get or keep a job, but does require the worker to pay union dues to help pay collective bargaining costs.
(Ch. 9) The __________ is taxed separately from individuals because it is recognized as a separate legal entity.
(Ch. 9) The summary statement attached to a paycheck that summarizes income, tax withholdings, and other deductions is the __________ statement.
(Ch. 9) The main disadvantage of the VAT is that it ____________
is invisible to consumers
(Ch. 9) The current individual tax code is now ____________.
more complicated than at any time in our history
(Ch. 10) A(n) ____________ amendment is a constitutional amendment that requires that annual spending not exceed revenues.
(Ch. 10) The largest category of spending by local governments is ___________.
elementary and secondary education
(Ch. 10) Historically, the federal budget was characterized by a remarkable amount of __________ spending, or spending in excess of revenues collected.
(Ch. 10) The __________ provision is a requirement that new spending proposals or tax cuts must be offset by reductions elsewhere.
(Ch. 11) A __________ is something accepted by all parties as payment for goods and services.
medium of exchange
(Ch. 11) Fraudulent banks that printed large amounts of currency in remote areas to make the redemption of their currency difficult were known as __________ banks.
(Ch. 11) Banks that catered to the interests of business and commerce and had the power to issue checking accounts were known as __________ banks.
(Ch. 11) A factor contributing to the savings and loan crisis of the 1980s was _______.
(Ch. 12)For people to use the savings of others, the economy must have a(n) _________ system, a network of savers, investors, and financial institutions that work together to transfer savings to investors.
(Ch. 12) Financial institutions that pool the funds that savers provide and lend them to others are called financial __________.
(Ch. 12) When investors speak of the ___________ market, they mean a market where money is loaned for more than one year. Long-term CDs and corporate and government bonds that have more than a year to mature all belong to this category.
(Ch. 12) The oldest, largest, and most prestigious of the organized stock exchanges in the United States is the ____________.
New York Stock Exchange
(Ch. 13) The ____________ accounting is a system of statistics and accounts that keeps track of production, consumption, saving, and investment in order to track overall economic performance.
(Ch. 13) The ____________ is an index of average level of prices for all goods and services in the economy that is computed quarterly and has a base year of 1992.
implicit GDP price deflator
(Ch. 13) A way to examine growth is with a ___________, a table that shows annual compound rates of growth between selected periods of time.
(Ch. 13) A major feature of a __________ is its ability to increase real per capita output enough to allow people to raise their standard of living. This system also increases people's free time, allowing them to devote more attention to families, hobbies, and recreational activities.
free enterprise economy
(Ch. 13) When productivity grows, people produce relatively ______ with the same amount of inputs, and the prices of goods and services tend to stay _______.
(Ch. 14) __________ unemployment is unemployment caused by workers between jobs.
(Ch. 14) __________ unemployment is cause by a fundamental change in the operations of economy.
(Ch. 14) __________ unemployment is directly related to the swings in the business cycle.
(Ch. 14) The five causes of the business cycle are:
Capital expenitures, Inventory adjustments, Innovation and imitation, Monetary factors, and External shocks.
(Ch. 15) The president of the United States appoints the _____-member Federal Reserve Board of Governors to ______-year terms.
(Ch. 15) In the short run, monetary policy affects __________.
interest rates and available credit
(Ch. 15) Repeated short-run attempts to keep interest rates low result in a _________ of the money supply, making inflation _________.
long-term expansion, worse
(Ch. 15) ___________ includes traveler's checks, coins, currency, demand deposits, and other checkable deposits.
(Ch. 16) The ____________ is the sum of the monthly inflation and unemployment rates.
(Ch. 16) The total value of goods and services that all firms would produce in a specific period of time at various price levels is called ____________.
(Ch. 17) A country has a(n) ___________ whenever it is able to produce more of a given product than another.
(Ch. 17) The ____________ argument is based on the belief that new or emerging industries should be protected from foreign competition.
(Ch. 17) A country has a(n) ____________ whenever the value of the products it imports exceeds the value of the products it exports.
(Ch. 17) A persistent trade imbalance tends to __________ the value of a country's currency on foreign exchange markets.
(Ch. 18) Under _________ the means of production are privately owned.
(Ch. 18) Under _________ the government owns and runs some of the basic productive resources in order to distribute output in ways deemed to be in the best interest of society.
(Ch. 18) Under _________ all property is collectively owned by the government, labor is organized for the common advantage of the community, and everyone consumes according to their needs.
(Ch. 19) The divisions of the _________ provide advice, interest-free loans to developing countries, and guarantees to foreign investors.
World Bank Group
(Ch. 19) The World Bank Group recommends that industrialized countries develop __________ policies that reduce budget deficits, stabilize inflation, lower interest rates, and stabilize currency fluctuations.
(Ch. 20) The largest category of nonrenewable energy in use today is _________.
(Ch. 20) A "pollution permit" issued by the Environmental Protection Agency (EPA) _____________.
forces firms to either clean up their own pollution or pay for costly permits